Shell Begins Offshore Oil & Gas Exploration In Alaska’s Chukchi Sea

Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) sent a drill bit into the ocean floor 70 miles off the northwest coast of Alaska and started its oil exploration on Sunday at 4:30 in the morning, according to the report from the Associated Press. The company paid $2.8 billion to the United States for petroleum leases in Chukchi Sea in 2008.

Based on the estimate of U.S. Federal officials, approximately 26 billion barrels of oil and 130 trillion cubic feet of natural gas are recoverable from the Chukchi Sean and Beaufort Sea in the Arctic.

Last August 30, Interior Secretary Ken Salazar approved the Shell’s preparatory drilling operations in the Chukchi Sea despite the absence of the company’s spill response barge, and the fat that it is not yet certified. According to Cutis Smith, spokesman for Shell Alaska, the oil spill response barge is still in Bellingham, Washington, and it will undergo sea trials over the weekend.

Smith also said the company’s workers completed mooring of the Noble Discoverer, the drill ship, in heavy seas, with eight anchors, each weighing 15 tons positioned on the sea floor in a circular pattern last Friday. According to him, the anchor pattern was more than 6,500 feet in diameter.

A 20x40x40-foot mud-lined cellar will be positioned in the sea floor for blowout prevention, and to provide protection from ice scraping the bottom.

In a statement, Pete Slaiby, vice president for Shell Alaska, described the company’s preliminary drilling in the the Chukchi Sea as historic. He said, “It’s the first time a drill bit has touched the sea floor in the U.S. Chukchi Sea in more than two decades. This is an exciting time for Alaska and for Shell. We look forward to continued drilling progress throughout the next several weeks, and to adding another chapter to Alaska’s esteemed oil and gas history.”

Slaiby also said the company will continue its drilling operations in the Chukchi Sea in the days ahead, and the company will also prepare to start its drilling activities in the Beaufort Sea.

Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) spent more than $450 billion to start its drilling operations in the Arctic Ocean. The company fought an environmental lawsuit and accomplished regulatory requirements to be able to start drilling. The company also faced short open-water drilling seasons and was required to stay out of oil-bearing rock.

Environmental groups strongly opposed Shell’s oil and natural gas exploration in the Arctic Sea, due to fears of possible oil spills similar to the Deep Horizon blowout in the Gulf of Mexico. Environmentalists argued that oil companies were unable to demonstrate their capability in cleaning up oil spills and it would be catastrophic for endangered species in the region, including bowhead whales, polar bears, and walrus if a blow out happens.

Shell management said there is a little chance for an oil spill to happen, because the company is drilling about 130 feet deep, versus 5,000 at the site of the gulf spill. The company also explained that the wellhead pressure is far less, and its support vessels are capable of quickly choking off and responding to a spill.